Google Chases the Declining Print Ad Business

It’s entertaining to watch tech commentators, who know next to nothing about the dynamics of print advertising (with all due respect), assess Google’s new print advertising program. Does anyone writing about Google Print Ads today know who the Nielsen of print ad buying is? (hint: it’s MRI — Mediamark Research).

It makes perfect sense that Google should give this print ad program a whirl (details at ClickZ), given that they want to be the broker for all advertising (it’s so Orwe…all right, enough of that). Rex Hammock observes:

As I’ve said over-and-over, the Google business model (as it relates to Adsense ads running on non-Google properties) is the advertising sales representation (agent) model, or, in this case, broker.

I’m not going to predict that Google’s print ad program will flop — that’s betting on the wrong side of history. But Google watchers might benefit from a little old media perspective.

IÃ¢â‚¬â„¢ve placed a $30 bid for a 1/4 page at Information Week. By far not enough I guess, but maybe at least that helps me find out what the winning bid was.

Okay, so there’s this thing that Old Media uses called a “rate card” — if you check out Information Week’s “media kit,” you’ll find that the 1X rate for a 1/3 page black-and-white ad is $15,790. Now, I’m sure InfoWeek will let Google “negotiate” a lower price to bring in advertisers they couldn’t otherwise get, but if $30 is a serious test bid, then this is all a big joke.

And if it is a joke, then the jokes on print publishers as much as it is on Google. Here’s the unfortunate trend in print advertising (from Media Life, an “Old Media” publication that I suspect few Google watchers read):

Magazines are starting the year on what looks like a bit of a rocky road.

After what was essentially a flat year in 2005, the Publishers Information Bureau reports that January ad pages, including the weekend magazines, were down 1.8 percent, to 13,756.8 pages, compared to the same month a year ago.

Of the 20 major consumer magazine categories tracked by Media Life, ad pages for the first month of 2006 were up for eight categories and down for the remaining 12. That compares to the 11 categories that saw gains in 2005 versus nine showing declines.

Reported ad revenues for January, based on rate card before discounting, were basically flat at -0.3 percent compared to January of last year, according to the PIB.

In terms of 12 advertising categories tracked by the PIB, seven were down in ad pages in January, while five were up. The biggest gainer was drugs and remedies, which was up 18.1 percent, to 1,068.1 pages, in the first month of this year compared to the same month last year. The biggest loser was automotive, down 24.8 percent, to 1,060.7 pages.

Similarly, last year’s big hurting categories are still hurting: the business and finance, personal finance and newsweeklies categories. Last year these titles were down 7.7 percent, 6.4 percent and 6.2 percent, respectively. This January they were down 4.8 percent, 5.1 percent and 2.9 percent, respectively.

So with all this doom and gloom, why is Google getting into this declining business? And why is the business declining in any case?

Here’s the crux of the issue for Google Print Ads and for print advertising in general: it’s really hard (if not impossible, in some cases) to measure ad performance and return on investment in print.

Google AdWords revolutionized advertising accountability and ROI (despite click fraud issues), by bringing science to a practice that has always been more of an art. Some print ads have a direct response mechanism — a phone number or a URL — but most are pure “branding.” There’s no way to know whether someone took action in response to an ad or even saw it.

AdWords works for so many companies because they can essentially run a P&L on their advertising — they can demonstrate that AdWords campaigns are profitable. But print simply does not provide the kind of response mechanism to allow advertisers to measure the return.

Not to mention that 1/4 page ads can be ugly (especially those that are text heavy), which destroys the appearance, i.e. high production value that is one of the main “benefits” of glossy print ads.

So I have to scratch my head when I heard things like this from Inside Google:

I bid on Ã‚Â¼ page ads in every tech publication on the list, on the off chance the bids are actually low. I might bid higher, but I doubt it, unless people want to take up a collection. I guess we could test if print advertising is actually at all useful.

How exactly would you — or any advertisers who seriously participate in the program — figure out whether “print advertising is actually at all useful”? If all these tech guys can figure it out, then more power to them.

So welcome, Google, to the print advertising game. Good luck. If you want to own print advertising, you can have it.

One of the biggest problems I see with this comes from the lack of instant placement. When you use an auction style process online, you can change your bid based upon real-time demand, day-parts, inventory, competition etc. With a print ad, you often have to submit your creative and state your “bid” months in advance. Demand could reduce, your product could be out of stock, you may have a new product launch – all in the time it takes to submit your ad and then see it published.